Singapore’s industrial production unexpectedly declined in January as demand for electronics and pharmaceuticals faltered.
Manufacturing fell 0.4 percent from a year earlier after a revised 1.3 percent gain in December, the Economic Development Board said in a report today. The median of 16 economists surveyed by Bloomberg News was for a 5.2 percent increase.
Singapore’s export-dependent economy has been constrained by an uneven global recovery that’s seen Europe struggle to exit its worst recession in four years and a manufacturing slowdown in China damping optimism its rebound is gaining traction. The island shipped fewer electronics in January, even as exporters from Thailand to Taiwan reported stronger demand for such items.
“We expect industrial production to underperform in the near term,” Chester Liaw, an economist at Forecast Pte in Singapore, said before the report. “A lot of the other Asian economies are direct competitors for Singapore’s electronics industry,” he said, adding that it will take some time for the city’s manufacturers to shift from producing computer processors to mobile phones, which are in greater demand.
Singapore’s biomedical industry overtook electronics last year as the biggest contributor to manufacturing, making up 25.5 percent compared to the other cluster’s 25 percent.
Data for overseas shipments and industrial production in Singapore for January and February may be distorted by the Chinese New Year holidays. Asian nations celebrated the Lunar New Year in January in 2012 and observed it in February this year, and factories from China to Vietnam typically shut and reduce production during the holiday.
The Singapore dollar was little changed at S$1.2389 against its U.S. counterpart as of 12:24 p.m. local time.
Output decreased a seasonally adjusted 9.2 percent in January from the previous month, when it rose a revised 6.6 percent.
Electronics production declined 3.4 percent in January from a year earlier, while pharmaceutical output slid 20 percent. Chemicals rose 2.5 percent, the report showed.